A Taxonomy of the Risks and Challenges of Embracing Blockchain Smart Contracts in Facilitating Renewable Electricity Transactions

Abstract

Environmental imperatives and global energy supply crisis are driving interests in the renewable electricity industry. Yet, the revenue risks of renewable generators make it challenging for them to attract finance from traditional investors. Several mechanisms have been proposed to minimize these risks but have their limitations. Blockchain smart contract arrangements have emerged as a new marketplace, addressing the shortcomings of these traditional electricity hedging mechanisms. However, they have their peculiar challenges, potentially impeding their mainstream adoption in the renewable electricity industry. Hence, this paper develops a novel taxonomy of the risks and challenges of embracing blockchain smart contracts in facilitating renewable electricity transactions. Examining these issues indicates that the adoption of blockchain smart contracts in the renewable energy industry can be facilitated by cooperation and partnerships between technology developers and researchers, renewable energy companies, as well as governments.